Market Wrap, May 20: Indices slip over 1%, NIFTY50 settles below 24,700 level, SENSEX falls 873 points; auto index tanks 2%

The Indian stock market settled lower for the third consecutive session on Tuesday, May 20, amid profit booking after a recent rally and cautious investors as both foreign and domestic investors offloaded equities.

The market participants remained nervous after credit rating agency Moody’s downgraded the US. Moody's Ratings on Tuesday said the uncertainties around US tariffs have negative credit consequences for debt issuers across emerging markets, including companies, governments and banks.

"The on-again, off-again US tariffs and difficulty predicting US trade policy have negative credit consequences for debt issuers across emerging markets," it said.

According to exchange data, both the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) offloaded equities on Monday. The FIIs sold equities worth ₹525.95 crore, while DIIs sold ₹237.93 crore on a net basis.

On the global front, Asian shares rallied on Tuesday after China cut key interest rates as part of its effort to fend off malaise worsened by the trade war.

Japan’s Nikkei 225 advanced 0.08% to end at 37,529.49 levels. Hong Kong's Hang Seng surged the most by 1.47%, closing at 23,681.48, while the Shanghai Composite rose 0.38% to settle at 3,380.48. South Korea’s Kospi, however, slipped 0.06% to end at the 2,60180 level.

The US benchmark indices shrugged off worries of a government debt ratings downgrade and closed in green across the board on Monday.

The Dow Jones Industrial Average gained 137.33 points, or 0.32%, to 42,792.07, the S&P 500 advanced 5.22 points, or 0.09%, to 5,963.60 and the Nasdaq Composite climbed 4.36 points, or 0.02%, to 19,215.46.

As many as 2,969 stocks traded on the NSE on Tuesday. Out of this, 1,974 declined, and only 915 advanced, while 80 scrips remained unchanged.

This, however, indicates that the market breadth favoured negatives.

A total of 49 stocks hit their 52-week highs, while 18 stocks touched their one-year lows. Besides, 117 stocks hit their upper circuit limits, and 55 touched their lower circuit bands on Tuesday.

NSE-listed firms' market capitalisation stood at ₹435.79 lakh crore at the end of the session.

The volatility index India VIX rose 0.17% to 17.39 levels.

Snapping its six days of rally, the broader market also settled lower. The NIFTY Midcap 100 index lost 1.62%, ending at 56,182.65 levels, while the NIFTY Smallcap 100 gauge tumbled 0.94% to close at 17,483 levels.

All the sectoral gauges ended in red, with Nifty Auto falling the most by 2.17%. Nifty Media (-1.36%), Nifty Pharma (-1.31%), Nifty FMCG (-1.32%) and Nifty Realty (-1.11%) were the other top losers.

Among the loser’s pack, Eternal took the lead, slipping 4.21%. Hero MotoCorp (-3.16%), Bajaj Auto (-2.84%), Maruti Suzuki (-2.69%), Shriram Finance (-2.69%) and Cipla (-2.67%) were the other top laggards.

On the other side, Coal India gained the most, rising 1.55%, followed by Tata Steel (1.28%), Hindalco Industries (1.16%), ONGC (1%) and Dr Reddy’s Laboratories (0.49%) on the 50-share index.